Media Whole latte love

These are tense times for the music industry. The old model is crumbling, but a new one has yet to emerge. People are listening to more music than ever before, yet CD sales have declined steadily over the last five years, and in 2005 by 8 percent.

This contradiction can be explained easily by modern society’s desire for customization. Digital-music services and iPods are flourishing because they allow listeners to be their own radio programmers, to take control of the music-distribution process, rather than allowing record labels to package the music for them.

The Starbucks Hear Music Coffeehouse was filled with customers on a recent evening. The café offers dozens of music stations at which customers can browse titles and burn their own CDs while sipping a beverage. (Photos by Mark Greenberg)

It’s symptomatic of the way people navigate the internet, view movies — with DVD extras that essentially give you the final cut and as much access to the creative process as you want — and channel surf on cable television. And to hear Tracy Rinehart tell it, this is the way Starbucks has been selling coffee for years.

Rinehart is general manager of San Antonio’s Starbucks Hear Music Coffeehouse, which opened on the River Walk December 19. Only the second Hear Music location in the country, following the Santa Monica store that debuted in 2004, the River Walk coffeehouse provides a hint of where record stores might be headed in the next decade. Within a sprawling 4,100-square-foot space (plus an upstairs patio), Hear Music offers a healthy, eclectic stock of CDs in the racks, with an emphasis on respected, rootsy singer-songwriters and artists particularly appealing to Starbucks’ reliable 25-45-year-old demographic. But the real lure comes from the store’s 35 interactive media bars, which allow consumers to sample new music and burn customized CDs (right down to their preferred disc design) while they’re downing a Cinnamon Dolce Latte or a Caramel Macchiato.

“The most success you’ll have is when you let people choose for themselves,” Rinehart says. “It’s no surprise that iPods have been the biggest sellers for the last two Christmases. People who come into Starbucks have been able to customize their needs for a long time, so this is perfect for them.”

Hear Music is merely the latest step in Starbucks’ crusade to morph from an omnipresent caffeine source into a cultural gathering place. Last year, Starbucks offered Bob Dylan’s much-bootlegged Live At the Gaslight 1962 as a CD exclusive and released new music by the likes of Herbie Hancock and Antigone Rising. The company also recently announced its intention to market DVDs and movie soundtracks, and it will begin promoting selected movie releases later this year. As for Hear Music, a third location will open in Miami in early 2006, with more expected to follow.

Rinehart says Starbucks executives picked San Antonio as an early test market for Hear Music because the River Walk setting offered “an ability to accommodate retail and as a showcase to conventioners and tourists.”

San Antonio’s Hear Music represents a refinement of the Santa Monica blueprint, because it’s a fully integrated store, while the Santa Monica location has separate, adjacent settings for music and coffee. In addition, the River Walk store introduces the use of a Starbucks card for music (“the next generation of technology,” Rinehart says) that enables consumers to leave the store while in the process of creating a CD wish list, and come back at a later time and resume the process.

A smartly programmed mix of music blasts throughout the store (during my visit, that ranged from “Hit the Floor” by Breakestra to “Ring of Fire” by Johnny Cash to “The Pride” by the Isley Brothers) while each digital-music station provides more than a million songs to sample. One of the most intriguing features is called Artist’s Choice, in which selected performers are asked to provide their own customized selection of song favorites. Elvis Costello offers Cole Porter’s “Let’s Do It (Let’s Fall In Love)” by Oscar Peterson, “Yesterdays” by Clifford Brown, and The Band’s “Tears of Rage,” among others. Joni Mitchell, in an unintentionally funny turn, includes her own recording of “Harlem In Havana” alongside Duke Ellington’s “Jeep’s Blues” and Billie Holiday’s “Solitude.”

In a recent statement, Ken Lombard, president of Starbucks Entertainment, said the Hear Music coffeehouses “truly transform the way consumers discover and acquire music,” but it’s more accurate to say these stores are adapting to the way people are already consuming music at home, from digital services such as iTunes and Real Rhapsody. The concept is innovative only in the sense that it’s new to retail outlets. The edge that Hear Music possesses over traditional record stores is an endless stream of foot traffic, a core constituency that can be drawn to the store’s music services.

“People who come for the music are much more aggressive about their CD purchases,” Rinehart says. “With the people who come for Starbucks coffee, once you show them the technology, you’ve got them here for two hours.” •